Nordea Research discusses its reaction to today's ECB policy meeting.
"The tone in the ECB’s message was quite positive and the central bank did not make serious attempts to change the market pricing of higher short rates already next year. Inflation worries may be increasing also within the Governing Council, even if Lagarde maintained that inflation will be below the target in the medium term," Nordea notes.
"We find rate hikes next year very unlikely, but given the ECB’s vague signals regarding market pricing, such pricing may yet escalate in the short term. Big decisions will be ahead in December, and we see an end to the PEPP and a fixed envelope of purchases for the APP," Nordea adds.